COMMERCIALIZATION OF THE CONVERSION OF BAGASSE TO …/67531/metadc702199/... · COMMERCIALIZATION...

COMMERCIALIZATION OF THE CONVERSIONOF BAGASSE TO ETHANOL

Summary Quarterly Report for the Period January - September 1999

BC INTERNATIONAL CORPORATION

February 2000

PREPARED FOR THE UNITED STATESDEPARTMENT OF ENERGY

Under Cooperative AgreementNo. DE-FC36-97GOI0224

DISCLAIMER ‘

This report was prepared as an account of work sponsoredby an agency of the United States Government. Neitherthe United States Government nor any agency thereof, norany of their employees, make any warranty, express orimplied, or assumes any legal liability or responsibility forthe accuracy, completeness, or usefulness of anyinformation, apparatus, product, or process disclosed, orrepresents that its use would not infringe privately ownedrights. Reference herein to any specific, commercialproduct, process, or service by trade name, trademark,manufacturer, or otherwise does not necessarily constituteor imply its endorsement, recommendation, or fdvoring bythe United States Government or any agency thereof. The\ iews and opinions of authors expressed hf!rein do notnecessarily state or reflect those of the lhited StatesGovernment or any agency thereof.

DISCLAIMER

Portions of this document may be illegiblein electronic image products. Images areproduced from the best available originaldocument.

1/20/00 Quarterly Report, Project DE-FC36-97GO1O224

Summary Quarterly ReportCovering Period 1/99-9/99

Task 1 TVA Bench/Pilot Testing

mlEThe pilot plant and bench scale work included sugar and ethanol studies in integrated

processes, including any vendor tests required.

Background:

These studies were intended to fbrther refine sugar yield parameters which effect sugaryield such as feedstock particle size, debris, acid soak time, temperature, dewatering, andpretreatment conditions (such as temperature, reaction time, percentage solids concentration, acidconcentration), liquid-solids separation, and detoxification parameters (such as time temperatureand mixing of detoxification ingredients).

Validate aid refine parameters, which affect ethanol yield such as detoxificationconditions mentioned above, and to fermenter conditions such as temperature, pH adjustment,aeration, nutrients, and charging sequence. Materials of construction will be evaluated also.

Evaluate stillage to determine clarification process and suitability for recycle.

Evaluate lignocellulosic cake for thermal energy recovery to produce heat and electricityfor the process.

Support Studies at UF - Toxin Amelioration and Fermentation

TVA work will provide pre-hydroylsates for the evaluation of BCI proprietary methodsof toxin amelioration. Pre-hydrolysates flom batch studies will allow the determination of therange of allowable hydrolyze conditions that can be used to produce a fermentable sugar stream.

This information is essential to guide selection of process parameters for refinement andvalidation in the continuous pretreatment reactor, and for overall process desi=m.

Additional work will be conducted at UFRFI to develop improved strains that areresistant to inhibitors. We are quite optimistic about the long-term prospects for thisadvancement having recently developed strains with a 25°/0-500/0increase in ethanol production.The biocatalyst platform selected originally, genetically engineered E.scherickia coli B, hasproven to be quite robust and adaptable.

Percent Complete: 100VO

Accomplishments:

The objective of Task 1 was to validate the 13CI data set. This objective has beenachieved, but at a higher than estimated cost.

The higher costs at TVA were due to equipment limitations at the bench scale, requiringthe work to be done at the pilot scale which is considerably more expensive. Rotatingelectrically heated digesters were planned to be used to perform process sensitivity analysisaround nominal conditions, and then using this data, perform several pilot scale runs that

Quarterly Rpt Jan-Sep 99 Page 1 of 10


validated the bench work. The electric heaters could not p“rovide controlled heat-up andquenching time frames to perform the desired experiments. The bench scale steam guns werealso tried, but again, controlled parameters could not be maintained. The bench scale testing wasabandoned after the team determined that the pilot plant was probably best suited to perform therequired experiments.

The team performed several trial runs in the Sunds digester, but the digester could notachieve the high solids level needed. BCI designedlbuilt a feed tube adapter to allow the use ofthe Kamyr reactor, which was believed to be capable of handling high solids. Trial runs usingthe BCI modified feed design proved this capability. The team revised its test plan, andembarked on a test plan that utilized the Kamyr reactor to perform a reduced sensitivity analysis.

During the period of June 1997 through October of 1997, over 25 tons of bagasse and ricehulls were processed under various acid concentrations, temperatures, and residence times. Theend result proved that 0.23 grams of sugar could be realized per gram of feedstock using diluteacid hydrolysis.

The higher costs were a result of a longer period to run the pilot plant, plus higheroperating costs since 5 people were needed instead of 3 per shift. The extra people were neededto insure feeding of material remained constant.

In order to provide greater confidence in the TVA test results, BCI also utilized AuburnUniversity and LSU for kinetic studies and feedstock testing. These results supported andaugmented those performed at TVA.

During the testing performed at TVA, many questions, and small unexpected issueswould periodically arise. In order to expedite resolution, BCI stationed a full time ProjectManager at TVA through its Joint Venture Partner ICF. This enhanced daily communicationsand quick resolution of problems, but it raised the cost of the work being done.

UFRFI Scope -1998:

The origin~l budget submission for Task 1 detailed $200,000 for UFRFI’S scope of workwhich focused on toxin amelioration and fermentability of hydrolysates prepared by TVA underdifferent conditions. The labor portion of this budget ($115,000) was based on one-man year ofDr. Ingram’s time, one-man year of Post-dot Associates time, 0.8 man-year of Grad Studentstime, and about 0.25 man-years of Lab assistant’s time (36 man months). The balance of thebudget was based on the historical use of supplies at $35,000 per year, and travel of $10,000.

Under Dr. Ingram’s direction, his assistants set-up and perform experiments in replicate,record data at six hour intervals (24 I-u&day), analyze results, and draw conclusions. Given thenumerous variables in each of the process steps and the need for replicates, this can amount toseveral thousand specific tests performed in a given year.

BCI will continue the optimization research under the existing agreement with UFRFI.The 1998 budget for this continued effort is based on the same man loading, supplies, and travelcosts as 1997 at a cost of $200,000. Specific elements of the 1998 effort included:

● Optimization of neutralization temperature and pH adjustment profiles to minimize sugardegradation, while maximizing sugar utilization by E. ColiKO11.

. Reduction in nutrient requirements forKO11,



. Investigation of alternative, lower cost nutrients.

. Sensitivity of co-mingling hydrolysates from different feedstocks at different concentrationsof each.

. Investigation of fermentation/neutralization sensitivity as a function of hydrolysis conditionssuch as temperature, acid concentration, and residence time.

BCI Consultants (Katzen/Okonski/Gaylor) :-1998:

BCI’S consultants played a role in supporting the efforts at TVA and other Labs. Some

key highlights of this support were:

● Attendance of several project reviews held at TVA to discuss process refinement,and equipment modifications to achieve desired results

. Design and fabrication of feed system adapters to allow the use of bagasse in the Kamyr

. Installation support of fabricated parts

. On-site and Phone support of Pilot Plant trials

. Assistance in refining measurement and analysis techniques

Task 2 Process Engineering

X!2wzThe initial objective of Task 2 was to perform process engineering for a single stage

dilute acid hydrolysis facility, followed by detail engineering after a project financial closing.

Background:

In 1998 the scope was amended to included the addition of a second stage dilutehydrolysis, but still included the detail engineering following a closing. A revised budget for thistask showed higher costs associated with this effort. The main reasons for the increase:

. Increased scope of work needed to perform the process engineering, and toachieve the knowledge sought by the engineers to provide a process guarantee:

● Longer time frame to peflorrn validation testing.

. Vendor validation testing not in the original scope.

. Vendor Request for Quotation and preliminary equipment negotiations.

Detail Engineering is being removed from the scope of work as part of this scope of workrefinement, since it was post-closing activity.

Percent Complete: 100% (see Task 9.1 for continuing refinements- in separate report)

Accomplishments:

Validation Testing at TVA:

. Defined and implemented a test plan to validate design assumptions to a level thatsupports process guarantees


.

1/20/00 Quarterly Report, Project DE-FC36-97G01 0224

● Provided project management at TVA to enhance communication and problemresolution

. Compiled, analyzed and summarized all validation testing into a comprehensivetechnical report that concluded there were no technical barriers preventingcommercialization of BCI technology. Report is available at BCI for DOEreview.

● Process Engineering: (Single Stage Dilute Acid)

Work Completed in 1997: developed preliminary scoping construction documents

●

●

●

●

●

●

●

●

●

Defined Design Basis for single stage dilute acid

Defined Work Scope for the Jennings Project

Completed Process Flow Diagrams (PFD’s)

Developed Equipment List and Sizings

Completed Preliminary Piping and Instrumentation Diagrams (P&ID’s) forestimating purposes

Obtained vendor pricing estimates for all major equipment

Performed several iterations of Value Engineering to reduce capita

Performed detailed Cost Estimates (not factored estimates)

Provided Overall Project Management

cost

Process Engineering: (Two Stage Dilute Acid)

Process Engineering was performed in 1998 to integrate a second stage dilute acidprocess into the existing Single Stage Process engineering package

The scope of work included:

●

●

●

●

●

●

●

●

Updated Design Basis to include integration of second stage acid

Updated Project Work Scope for the Jennings Project

Updated Process Flow Diagrams (PFD’s)

Updated Equipment List and Sizings

Updated Preliminary Piping and Instrumentation Diagrams (P&ID’s) forestimating purposes

Updated Vendor pricing estimates for all major equipment

Several iterations of Value Engineering to reduce capital cost

Overall Project Management

BCI Consultants (Katzen/Okonski/Gaylor) Support to Process Engineering:


.


To support the Process Engineering effort, BCI’S consultants were responsible forreviewing and providing recommendations on process design, detail engineering, and providing

the necessary engineering support to resolve questions that pertain to site specific issues. Theyprovided BCI an independent check on progress, costs, and quality of the work being performed.Specifically, BCI has employed these consultants because of their skills and experience inHydrolysis, Fermentation, Distillation, Power Generation via Biomass Boilers, andSite/Civil/Structural, which has contributed toward value engineering and capital cost reduction.

Task 3 Jennings Site

&!?PE

The scope of this task covered site expenses to keep the Jennings site active, andrefurbishment of the pilot plant lab.

Background:

The primary objectives of Task 3 were to:

● Maintain the Jennings Site until project closing

● Refhrbish existing equipment

● Refurbish the Lab.

Refurbishing of existing equipment is being removed from the scope of work as part ofthis scope of work refinement, since it was a post closing activity.

Percent Complete: 100?4o (see Task 9.4 for ongoing site effort – in separate report)

Accomplishments:

The Jennings site has been significantly cleaned up over the past year. All majorequipment is accessible, and the site maintained regularly to prevent overgrowth of vegetation inthis fertile climate. This effort has allowed the BCI engineering team to better quantifi theexisting equipment condition, and has resulted in greater utilization of these assets.

The lab was refurbished, and is operational. Refurbishment included:

●

●

●

●

●

●

●

●

●

●

Refurbished HPLC

New Gas Chromatography/Mass Spec

Lab Benches and hookups

Vent hoods

Deep freezer for KO11 storage

Moisture indicators

Ovens

Scales

Hammer mills

Lab fermenters


.


. Lab glassware and reagent grade chemicals

Task 4 Environmental Assessment

The scope of this task covered an environmental assessment of the Jennings project,performed under DOE direction by Dames and Moore.

Background:

Dames and Moore was hired by the Golden Field Office to perform an environmentalassessment for the Jennings project. Gaylor Engineering assembled a project package whichincluded PFD’s, Mass Balances, Design Basis Documents, Local site and permit information,transportation study and responded to various questions that arose by Dames & Moore.

Percent Complete: 100%

Accomplishments:

The EA was completed in 2Q99, and submitted for public and agency comment. Theonly response came fi-om the Fish, Game, and Wildlife. The issue raised was over the concernthat the Jennings project would generate demand for bagasse from farmers. BCI provided aresponse highlighting that bagasse was a mill waste product, and therefore this was an unlikelyscenario. A response to Fish, Game, and Wildlife was issued from the Golden Office, and afinding of no significant issues (FONSI) was issued on August 27, 1999.

Task 513C1 Project Related Overhead

Scope/Background:

Task 5 was added to reflect the actual project related overhead costs incurred by BCIduring 1997. These costs were not included in the original DOE budget submission.

Percent Complete: 100940

Accomplishments:

The updated BCI project related overhead costs were submitted to DOE in the secondamendment, and approved.

BCI Overhead expenses for 1998 were prorated in the labor rate for BCI employeesassigned to the project. Using 1997 actuals, and adjustments for expected 1998 costs, anoverhead rate of 50’%0was developed. The rate was calculated using the total company payrollcosts plus tinges, as the allocation base. Itemized costs in the overhead pool, as indicated, wereestimated for a month based on most recent historical costs with modest increases for 1998, andthen calculated for the 13-month period covered by this projection.

Task 6 Be//e G/ade Acquisition:

&!2P!zTask 6 reflects the acquisition of the Great Lakes Belle Glade Furfiu-al facility by BCI.


.


Background:

The Great Lakes Belle Glade Furfural facility was purchased because its equipmentcould be utilized in the Jennings project at a significantly lower cost. The project schedule wasalso improved because several pieces of equipment were on the critical path if new equipmentwere to be purchased.

Percent Complete: 100?40

Accomplishments:

The facility was purchased on March 30, 1998 for $2.5 Million Dollars, plus BCI paid aFlorida State sales Tax of 6?40,or an additional $150,000.

Task 7 Belle Glade Relocation

Scope/Background:

Task 7 defined the effort to dismantle the Belle Glade facility down to the concrete pads,transport equipment that will be re-used at Jennings, disposal of all scrap/waste, and refi.ubishequipment to specification. This work effort was expected to take a total of 20 weeks to perform.

Percent Complete: 100°A

Accomplishments:

The following paragraphs summarize the completion of the work effort associated withthe dismantling and relocation of usefid equipment from the Belle Glade facility.

The scope of work covered in Task 7 encompassed:

● The dismantling of the Belle Glade facility down to concrete pads

. Inventory and transport of equipment that will be re-used at Jennings or other BCIprojects

● Disposal of all scrap and waste.

The projected cost to complete this work was $2,159,800, and estimated to be completedin 20 weeks.

BCI completed the purchase of the Belle Glade facility on March 30, 1998, and beganmobilizing a team to begin dismantling the same day. BCI hired the following team to performthe scope of work described above:

ROLE

Project Management

On Site Project Manager

Dismantle Contractor

Transportation Contractor

COMPANYGaylor Engineering

Louis Shuman (consultant)

The Industrial Company (TIC)

Venture Trucking


,.

1/20/00 Quarterly Report, Project DE-FC36-97G0 10224

Upon mobilization of the team to the Belle Glade facility, protocols for communication,safety; and roles and responsibilities were established. The first activity performed was to veri~the inventory of all equipment per the equipment list, and to designate three dispositioncategories:

. Primary for Jennings (P)

● Secondary for future projects (S)

● Scrap I salvage

The disposition category was based on discussion with the Jennings engineering team asto whether or not a specific piece of equipment could be used for Jennings or a future project. Ifequipment could be utilized, then an economic analysis was performed to determine the cost tosalvage / transport and refurbish was less than 75°/0 of the cost of new. If so, the equipment wasdesignated for P or S. For equipment designated as scrap / salvage, an economic analysis wasperfonmed to determine the best alternative.

In parallel with the equipment classification, BC1 and the project team managed thetransport of all office, lab, and maintenance equipment and spare parts to Jennings for localstorage. Office equipment will be re-used upon completion of the Jennings project; all labequipment was re-installed to support the pilot plant work effort; the maintenance equipmentand spare parts were also put into service to support pilot plant activity.

The dismantling effort began in earnest the second week of April, 1998. The mainstructure was dismantled from the top down. The equipment was brought to ground level; it waseither loaded onto a truck for transport to Jennings, or put in an appropriate salvage pile.Attached with this report is a Bill of Lading Summary by truck load, with the inventory ID foreach piece of equipment. By job end, there was 126 truck loads from Belle Glade to Jennings.The last load left Florida on July 10, 1998.

Clean up of the site was performed during the first two weeks of July. All cleanupactivity was complete by July 16, 1998, and the entire team demobilized from the site. The efforttook less than the 20 weeks estimated. In summary, the entire task scope was performed in lesstime, and for approximately $400,000 less than the $2.1 million budget estimate.

BCI Consultants {Katzen/Okonski/Gaylor):

To support the dismantling effort, BCI’S consultants will provided periodic on-site visitsto insure the dismantling is performed to contract specifications, and to become familiar with thevarious pieces of equipment. The dis-assembly experience will be invaluable during therefhrbishrnent and re-assembly at the Jennings site.

Costs Incurred for Tasks 1-7: (as of 12/17/98)

Total $12,726,805 DOE Share: $6,000,000 BCI Share: $6,776,805


..“


Task 8.0 Closing Costs (This task was deleted and funds rolled into task 9.0.)

{It is being provided here for continuity.)

Background:

Task 8 was defined as the expenses associated with closing on the financing of the

Jennings Project. Upon closing, activities were to include purchase of product insurance,mobilization of contractor(s) at the plant site, the purchase of “long term delivery” equipment,site preparation for the construction activities and on-going direct labor and plant support costs.

A project closing did not occur as planned in 1Q99 due to several factors involvingperceived risk by several financial groups. BCI has continued to pursue alternative financingarrangements in 1999, and expect to close the project in 4Q99. Task 9.0 defines the activitiesassociated with preparation for closing. BCI requests that, consistent with DOE objectives, thefunds originally allocated for task 8 be re-directed to task 9.0 to allow for continued efforts tosecure financial closing. Task 8 has been deleted from the scope of work for this contract, sinceit has post closing activity. For reference, the scope of work for Task 8.0 as submitted inJanuary 1999 is detailed below:

Percent Complete: 070

Scope of Work previously submitted:

In previous cost sharing activities, 7 tasks have been described and executed which relateto the commercialization of biomass to ethanol technology using a patented, geneticallyengineered microorganism. This commercialization includes a $74 million Engineering,Procurement and Construction (EPC) contract for a facility to be buik/retrofitted in Jennings,Louisiana, and the first 7 tasks were specifically associated with that effort.

The commercialization effort has progressed to the point where the finding sources(lending and equity) have been identified, business issues have been developed and areessentially agreed upon, and due diligence/documentation is proceeding towards financialclosing, which includes completion of a number of requirements. In the context of this $74million project, over the next several months (through Au=wst 1999) the closing is expected to beimminent. Upon closing, activities will include purchase of product insurance, mobilization ofcontractor(s) at the plant site, the purchase of “long term delivery” equipment, site preparationfor the construction activities and on-going direct labor and plant support costs.

Contractor – Mobilization

At financial closing of the Jennings Project, the contractor will immediately startmobilizing equipment and the engineering and construction teams that will be assigned to theproject, including inter alia:

. Assembling and transfen-ing Mobile equipment

● Setting up temporary living quarters and offices

. Setting up various site utilities such as electric, gas,responsibility of the contractor

and telephone that are the

. set-up of temporary site trailers, purchase of small tools, expendable, and safetyequipment



. Setting up appropriate Insurance

● Setting up appropriate bonding

Purchase of Long Term Delivery Equipment, or Long Lead Items

The Jennings Project will be managed on a fast track schedule basis. Mechanicalcompletion is expected in 17 months from notice to proceed. In order to support this schedule,deposits for long lead items are needed to procure the new equipment, and reserve shop time atthese suppliers. This has become necessary due to the strong national economy, which hasresulted in longer lead times for equipment and services. The up front deposits (10°/0) forequipment will minimize schedule risk for the contractor and BCI. Long lead items areestimated to cost $10,000,000, and include

. Biomass boilers/support equipment

. Two natural gas turbines – 4MW/each

. Five distillation columns

● One liquid – solid separation system

Site Preparation:

Site preparation for the Jennings Project encompasses clearing, grading, fencing, security,site drainage, utility relocation, soil stabilization, and structural fill for the main site, plus theclearing, grading, and creation of a bagasse storage area on the new property. This storage areawill be built over a gravel base leachate collection pad. The leachate and rainwater run-off willbe collected from the pile into a sump for any required treatment. The site preparation isexpected to begin within two weeks of a notice to proceed, and be complete by month seven ofthe project.


COMMERCIALIZATION OF THE CONVERSION OF BAGASSE TO …/67531/metadc702199/... · COMMERCIALIZATION...

Documents

Transcript of COMMERCIALIZATION OF THE CONVERSION OF BAGASSE TO …/67531/metadc702199/... · COMMERCIALIZATION...